Sony forecasts loss of $2.1 billion, cancels dividend after cutting value of mobile business

Sony just launched their Xperia Z3 a day ago and now we hear that the company seems to be in trouble with it’s smartphone business.

AP reports that SONY anticipates a loss of 230 billion yen ($2.15 billion) for the fiscal year that ends Mar 31, 2015 due to competition especially from low cost phone makers.

It is also For the first time since going public in 1958, the Japanese electronics and entertainment conglomerate canceled dividend payments for the half- and full-year.
“This is the very first time we ever eliminated a dividend,” said Sony’s president Kazuo Hirai. “For more than 50 years we always paid a dividend. The entire management takes this very seriously.”

The company intends to cut 15% of it’s mobile communication staff or 1000 people. The smartphone business has proven particularly tough for Sony being sandwiched by low cost China phones and high end innovative brands like Apple and Samsung.

“The Chinese smartphone manufacturers have made great strides and are expanding outside their own market, and this has caused a shift in the pricing,” he said. “Meanwhile, Apple and other manufacturers are launching strong, innovative products. The changes are very rapid and dramatic.”

Hirai said Sony expects a loss in its mobile business this year, but would return to profit by cutting costs and focusing on higher end devices. It is also positioning itself for future growth in smartphones and mobile technology.